Statement on the conclusion of the B-BBEE Advisory Council meeting

The Black Economic Empowerment Advisory Council, met in the Union Buildings, Pretoria today (1 April 2011, chaired by President Jacob Zuma, to discuss how to take forward the agenda of economic transformation and to promote inclusive growth.

The meeting discussed various issues.

There was a special emphasis on the implementation of the New Growth Path and the role of BBBEE in creating jobs. The meeting emphasised that BBBEE is not just about big business deals for a few individuals in society. It also has to be about the real empowerment of ordinary people. In this regard, the Council called for the consistent implementation of broad-based BEE in all sectors of the economy, to ensure that the policy touches the lives of more people.
The meeting underscored that BBBEE is central to inclusive growth. Provisions in the New Growth Path were supported which require a much stronger focus on the broad-based elements of the BEE regulations, such as ownership by communities and workers, increased skills development and career-pathing for all working people and support for small enterprise and cooperatives, as well as a new emphasis on procurement from local producers in order to support employment creation.

It was pointed out that to contribute to job creation, BBBEE has to, amongst others, promote new enterprise development, encourage local procurement and enhance skills development and employment equity.

The shortcomings in the implementation of BEE were noted, especially the over-emphasis on diversity of ownership and senior management.

“The unintended consequence of this over-emphasis is fronting and tender abuse. We are happy that the Council spoke out so strongly against fronting which is one of the major obstacles to the implementation of BBBEE. Fronting is an insult to the dignity of the poor and we have to act decisively against it. I am pleased that the Council is so determined to work with us to act against this heinous practice,” said President Jacob Zuma.

It was agreed that fronting insults the dignity of the poor and this practise needs to be eradicated further with a view to finding effective mechanisms of eradicating this practice including possible punitive measures against those guilty of fronting practices.

It was agreed that government, with the support of the BBBEE Advisory Council, would ensure a revision of the BBBEE Codes to promote employment creation, investment in small business and cooperatives, broad-based ownership and employment equity.

The Council also recommended that government should urgently ensure proper monitoring and evaluation of the implementation of the BBEE Act. As per the BBBEE Act, all heads of government departments and chief executive officers of State Owned Entities have a legal obligation to report on the performance of their institutions on the implementation of BBBEE.

The meeting outlined the importance of ensuring the coordination of work across government departments to improve implementation.

A progress report was presented by government on work done in the past year to promote job creation. Amongst these are the following:
• The full budget of R41 million for the Co-operative Incentive Scheme was paid out to 222 co-operatives, creating around 2159 new direct job opportunities and a further 745 temporary job opportunities.
• A total of 100 new small scale cooperatives with approximately 500 new job opportunities were established, and 113 cooperatives were supported to enhance access to markets through local and international exhibitions.
• A total of 224 new SMMEs were created, 656 SMME’s were supported and 6678 direct and indirect jobs were created and amongst these, 35% are women-owned and 96% are black-owned.
• Government has 30 incubators countrywide, supporting SMMEs in various industrial sectors including chemical, biotechnology, floriculture, small-scale mining, ICT, stainless steel, furniture, construction, jewellery, bio-fuels, agriculture, automotives, base metals, mixed manufacturing and aluminium.

The Council was appointed in December 2009, in terms of the Broad-Based Black Economic Empowerment Council Act no 53 of 2003. Government is pursuing the BBBEE policy because the material conditions that required the implementation of the programme have not been adequately addressed yet. The majority of South Africans still lag behind the historically advantaged groups in terms of amongst others, the ownership of productive assets and access to capital and financial resources.

The functions of the Council include providing advice to government on black economic empowerment, reviewing progress in the implementation of BBBEE as well as providing advice on the draft codes of good practice and draft transformation charters if required.

The President expressed his appreciation of the support of the BBBEE Advisory Council in helping government to take economic transformation forward.